UPDATE, 7:35 AM: Chairman Roy Bostock said in a conference call that Yahoo handed the CEO job to Scott Thompson, a technology guy from PayPal, instead of to a turnaround or media specialist because “the key to success in advertising is providing a great customer experience.” He added that “Scott knows how to reach out to [advertisers] and learn what they need and what they want.” Bostock wouldn’t discuss Yahoo’s strategic review — except to note that “the primary focus will be on the core business” and that Thompson will be part of the review process. Bostock did say, though, that he expects Yahoo to remain publicly traded. The possibility of going private “is a moot issue as far as I’m concerned.”

As one might expect, the new CEO stuck with broad generalities. “It’s too early for me to have any informed opinions” about the display ad business, Thompson said. His top priorities will be to “grow shareholder value and top-line growth.” Yahoo’s “core assets are stronger than people believe.” Thompson plans to study usage statistics. “Down in the data we’ll find ways to compete and innovate that the world hasn’t seen yet.” He says the changes in the Web over the next five years are “hard to imagine,” but “we’ll be back to innovation and disruptive content” including on mobile devices.

PREVIOUS, 6:19 AM: Yahoo has been driving to become one of the Web’s leading ad-supported content providers, but it turned the top job over to an executive with a deep resume in technology. Scott Thompson was PayPal’s Chief Technology Officer before becoming its President. Before that he was EVP technology solutions at Inovant, a Visa subsidiary that oversees the company’s global technology. He also was Chief Information Officer of Barclays Global Investors, and worked with Coopers and Lybrand to help provide information technology to financial services companies.

Yahoo may be looking for a place-holder while it continues to sort out its options. Chairman Roy Bostock says that the company is continuing its strategic review process and “is considering a wide range of opportunities for the Company’s business, as well as specific investments or dispositions of assets.” Investors are unconvinced that Yahoo can keep up with Internet ad giants led by Google — and, increasingly, Facebook. That contributed to Yahoo’s decision in September to oust then-CEO Carol Bartz.

Here’s Yahoo’s release:

SUNNYVALE, Calif.– Yahoo! Inc. (NASDAQ: YHOO), the premier digital media company, today announced the appointment of Scott Thompson as Chief Executive Officer, effective January 9, 2012, at which time Tim Morse will resume his role as Chief Financial Officer. Thompson has also been appointed to the Company’s Board of Directors, effective January 9, 2012.

Thompson served most recently as President of PayPal, a division of eBay, where he continued his established track record of growing businesses by driving customer engagement built on strong technology platforms. Under his leadership, PayPal solidified its lead as the global online payment service, expanding its user base from 50 million to more than 104 million active users in 190 countries worldwide, increasing the number of merchant partners to more than 8 million globally, and growing revenues from $1.8 billion to $4+ billion in 2011.

“Scott brings to Yahoo! a proven record of building on a solid foundation of existing assets and resources to reignite innovation and drive growth, precisely the formula we need at Yahoo!,” said Roy Bostock, Chairman of the Yahoo! Board. “His deep understanding of online businesses combined with his team building and operational capabilities will restore the energy, focus, and momentum necessary to grow the core business and deliver increased value for our shareholders. The search committee and the entire Board concluded that he is the right leader to return the core business to a path of robust growth and industry-leading innovation.”

“Yahoo! is an industry icon and I am very excited about the prospect of working with one of the great teams in the online world to deliver Yahoo!’s next era of success,” Mr. Thompson said. “Yahoo! has a rich history and a solid foundation to build on, and its continued user engagement is one of the many reasons for my enthusiasm. With the ultimate goal of delivering the value our shareholders expect, my immediate focus will be on getting to know the entire team and hearing more from all Yahoo!s, working closely with the engineers and product teams, and diving deeply into our products and services to learn more about what our more than 700 million users find most engaging and useful. I will also be working directly with our region leaders and sales teams globally to get a clearer understanding of the needs of our advertisers and publishers. Clearly, speed is important but we will attack both the opportunity ahead and the competitive challenges with an appropriate balance of urgency and thoughtfulness. I cannot wait to get started.”

“Scott’s primary focus will be on the core business, and as CEO and director, he will work closely with the Board as we continue the strategic review process to identify the best approaches for the Company and its shareholders. As part of this process, Yahoo! is considering a wide range of opportunities for the Company’s business, as well as specific investments or dispositions of assets,” added Bostock.

“We are all grateful to Tim Morse for leading the company with a steady hand during the last several months. His deep understanding of the Company and his positive approach kept the company on course and we will continue to benefit from his exceptional capabilities as he returns to his Chief Financial Officer role,” Bostock concluded.